Best Small Business Financing Tips
There is no escaping the simple fact that owning a business can be an expensive proposition. There are startup costs that will depend on if you’re opening a “brick and mortar” type of business or an e-commerce site. You might need to hire staff, rent office space and procure equipment. All of that needs to happen before you can attract your first customer. This is why your business will need some level of financing. Some of that money might come out of your own pocket. That should actually be the last option. Instead, consider these other approaches for financing. You can utilize one or all of them.
Apply for a Grant
Grants are commonly awarded in academia. You can apply for a research grant or to continue your studies. There are also grants offered to small businesses. The best thing about grants is it will be money that doesn’t have to be paid back. The bad thing is that competition is fierce for these grants, especially in a thriving business community. However, there are some grants that are more focused like providing financing for minorities, veterans or women. A little targeted research will reveal all the available small business grants in your area. The small amount of time you would use to fill out the applications will be well worth the effort if you’re awarded that grant. Remember No paybacks!
Refinance Your Debt
You might already have some business loans that helped you get started. Keeping up on the payments on those loans will help you build up your business credit. However, those payments can also take a big chunk out of your working capital. That is why you should consider refinancing those loans. A lower monthly payment, a longer payment term or lower APR rates should all be on the table when you consider refinancing.
Utilize Business Credit Cards
If you have trouble securing a loan because your business is new and unproven, then you might be able to utilize business credit cards for some purchasing options. There are deposit backed cards that allow you to put money down and then use that card as a way to build up your credit. Paying off the card balance each month will have your score ticking up very quickly.
Focus on Savings
Along with all your other business accounts, you’ll want to set up a savings account where you can direct funds. Think of this as your rainy-day account. Put money in there and forget about it until it is needed. A savings account might have a lower interest-earning than a CD but it will provide you quick access to your funds. You’ll always want that option in business.